Europe midday: Stocks rise after positive data, 'dovish' Fed chairman

Stocks on the Continent are moving higher with sentiment buoyed by stronger than expected readings on industrial production out of France and Italy and what at first glance appeared to be a dovish speech from US central bank chairman Jerome Powell.

At 1500 BST, Federal Reserve chief Jerome Powell will deliver his semiannual monetary policy report to Congress and investors are keen for further details around the possible extent of any policy easing.

But already in prepared remarks released 90 minutes ahead of Powell's testimony, the Fed chairman said there was "a risk that weak inflation will be even more persistent than the Fed is currently anticipating."

In the background, overnight it was reported that the Presidents of the US and China had held their first telephone conversation since the G20 leaders's summit at the end of June, although no details were forthcoming.

As of 1333 BST, the benchmark Stoxx 600 had turned around and was edging up 0.10% to 388.38, alongside a dip of 0.15% to 12,418.96 for the German Dax, although the FTSE Mibtel was ahead by 1.11% at 21,128.15.

Meanwhile, front month Brent crude oil futures were rising by 2.5% to $65.77 a barrel on the ICE and euro/dollar was adding 0.31% to 1.12438.

In parallel, the yield on the benchmark 10-year German bund was rising by five basis points to -0.31%.

There were some positive surprises on the economic front.

According to INSEE, French industrial output expanded at a clip of 2.1% month-on-month, far exceeding the 0.3% rise expected by economists.

In Italy meanwhile, industrial production was 0.9% higher month-on-month (consensus: 0.1%).

Spanish issues with exposure to Mexico, including BBVA, Iberdrola and Telefonica came under early selling pressure following the shock resignation overnight of the country's finance minister.

Germany's Leoni remained a tad lower despite a Reuters report that it was exploring a sale or flotation of its wire and cables unit.